Have you read any of the fine print on the back of your credit card statements lately? If not, you might want to take a good look at one of them. And it would probably not be a bad idea to give it a look every time you get a statement in case they make any changes.

I was carrying a pretty good balance on another credit card, and was getting killed on the interest payments every month. About half of my payments were paying down the balance and half of the payments were going right into the pockets of the credit card company.

This was not a surprise to me. I know how they work their magic with the intent of keeping people in debt to them as long as possible.

Then I got an interesting offer in the mail from the Discover Card people a few months ago. I already had a Discover Card, and had used it a bit here and there but not very often, and I did not have an outstanding balance on it.

The offer was pretty attractive, they were offering me 0 percent interest until next summer. I thought it would be nice to have the entire amount of my payments going towards paying down the balance for almost a year.

Just to be sure I would not be getting in over my head, I called Discover Card and asked them if they could give me a rough estimate of how much my monthly minimum payment would be if I did transfer the balance to them. The woman on the phone told me approximately what the payment would be, which turned out to be pretty much in line with what my minimum payment was for the other card I was paying every month.

It sounded like a no-brainer. I would be paying about the same monthly minimum, but all of the money would go towards paying down the balance until next summer. I transferred my balance to the Discover Card and felt that it was a pretty good deal.

Since then I made two monthly payments to Discover. The monthly minimum was a little higher than what the woman on the phone told me, but only about $10 more so it was no big deal.

My most recent Discover Card statement arrived about a week ago, and you can imagine my surprise when I saw that the monthly minimum had suddenly doubled in size. No, that’s not a typo – the monthly minimum payment had doubled!

This was quite a shock to me, and did not really fit too well into our current budget, so I was not very pleased about it, and I decided to give Discover Card a call to find out what was up.

When I reached the customer rep on the phone (who actually was very nice, by the way), she explained to me that if 90% of your balance is from a balance transfer, they raise the minimum balance by changing the percentage of your outstanding balance that is due every month from 2% to around 4%.

There was no explanation as to why this was the policy, but you’d think they would be more grateful that you transferred your balance to their card, and not be blindsiding customers with a doubling of their minimum payments. After all, it’s unlikely that my entire balance will be paid off by next summer, and at that point, they stand to start making money of the interest rate that kicks in at that time.

As I said, the woman I talked to was very nice, and she offered to lower my rate back to 2% if that was what I wanted. I told her to go ahead and do that and thanked her. Kind of strange the way a phone call was all it took to bring that monthly minimum payment right back down again.

I’m going to confess that I may not have read that original balance transfer mailing they sent me, and perhaps somewhere in there, it mentioned the increase in the minimum payment and I missed it. Still, that does not explain why my first two payments were pretty much in line with what I was told before I transferred the balance and then suddenly doubled without any warning. The woman I spoke with at Discover Card before I made the transfer made no mention of the payment going up.

If their policy is to charge more for balances that are made up of 90% or more of a balance transfer amount, why was that not reflected in my first two payments or imparted to me by the woman I called at Discover before I went ahead and initiated the transfer?

That smells a little rotten to me.

Anyway, I was glad to get the minimum payment back down to where it was, although they would not let me off the hook for the statement they had already sent out, so I do have to make one payment that is double the amount when I first started making payments to them.

The main point is, make darn sure you know what you are getting into when you decide to go with one of these 0% balance transfer deals or anything else a credit card company or bank is offering. Ask a lot of questions and make sure you get the all the details of the deal.

This time the case is clearly do as I say and not as I do, because I should have taken the extra time to understand every detail of this balance transfer deal. It all ended well, since my minimum payment will return to what it originally was, but it could have become nasty if they refused to do that.

The bottom line is that there are very few companies in the financial industry (perhaps any industry) that you can trust. Who knows, maybe there are none. Look at the mess the global economy is in now and its partly due to the greed of big financial institutions who were passing out mortgages like candy to people who could not afford to keep up with the payments. So much for the CEOs and other MBA geniuses that run these institutions. They’ve contributed to the worst economic crisis since the Great Depression. Nice going, guys!

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Tags: Discover Card, Increased, Interest Rate, Monthly Minimum Payment